I have linked to a million articles about why rich kids grow up to be rich and poor kids grow up to be poor. If you want a nice summary of that data, check out this article in the Atlantic. The big takeaway is that the reason rich kids grow up to be rich is that they don’t have debt.

That’s really important, because the way kids accrue debt is usually through education. So it’s ironic that you want an education to improve your economic mobility, but the cost of education actually stifles mobility. Except for rich kids, because their parents pay.

I graduated from a very expensive private university with no debt. If I had been paying back school loans in my twenties, I would not have taken the risks I took, like getting on pro-beach volleyball circuit, or going back to graduate school for English.

I’m not saying that a graduate degree in English is the key to success in life, but taking risks is. And I took a risk by quitting the pro tour and going to graduate school, and I took a risk by leaving graduate school early when I realized knowing how to hand-code HTML in the early 90’s was worth $70/hour.

This data is right in line with the recent finding that the biggest factor about whether or not you’ll be a startup founder is how much money your parents have. Because kids don’t do startups when they have student loans to pay. You can’t live on Ramen noodles in an apartment with five other people if you have student loans to pay.

(A digressive rant: Silicon Valley is a bunch of overprivileged kids who think they somehow have earned their Peter Pan intelligentsia lifestyle when in fact, their parents bought that for them more than anything they did themselves.)

2. Choose a state school. My older son wants to get a PhD. Which means his graduate school matters a lot more than his undergraduate school.

3. Attend community college for two years. I’m not sure but it seems really cheap. But I wonder if it undermines the credential, since I think if you’re going to bother getting a degree you should get it from a school people won’t scoff at.

4. Skip college completely. This choice is the most logical one, although I fear I might be all talk here since both my kids are on track to go to graduate school.

5. Parents take out the loans. I actually think I would do this before I’d have my kids take out loans. I know all the financial planners say that my kids should have the loans and not me. But the mental anguish I have seen kids contend with because of those loans seems to undermine all the intellectual freedom and risk-taking I’ve taught them to appreciate as homeschoolers.

Comments (42)

I agree that graduating debt-free is game-changing, but also want to point out a couple of things.

My parents have seen a lot of their peers shoulder the cost of their kids’ expensive education, leaving them with insufficient retirement funds. That money could have been invested elsewhere for a tangible return that could eventually help the entire family (like paying for home/childcare help, so your kids can be entrepreneurs). I think if you are like Penelope and can earn indefinitely, then go for it. But many salaried workers can’t make it work.

Many people transfer from 2 year community colleges to very reputable 4-year universities. They also miss out on making friends for those two years, which for some people is the most valuable part of going to a university. By junior year, kids are living like young professionals, off campus and commuting to school. I am still grateful for my freshman year friends. They are some of the brightest women I know and I can always get good advice from them.

One of the things that makes IL great is it’s community college system (another is our free state parks). It is very common for even valedictorians to go to their local cc for two years and transfer to a 4 year school to finish. The degree is ultimately from the four year school. The cc closest to me has tuition, fees, and books for $4,000 per YEAR.

If I was thinking about my own sons, I would worry about them missing out on those 2 years of networking and making friends at the 4 year school. My Millikin friends are my dearest life long friends and I wouldn’t have met them if I didn’t arrive until junior year. My husband would have been long gone by then too.

Posted by Rayne of Terror
on August 18, 2015 at 10:14 am
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I totally agree with your basic premise, which is that students need to avoid college debt. I also agree state schools are a terrific option.

Re: community college – I think this is an excellent option. Why not? You’re mostly getting general ed out of the way. I actually think that community college students could be better students. They’re not mired in the freshman/drinking/party routine. They often live at home and work while they attend school. If they have aspirations of attending a university, they’re working for it and must be diligent students to be able to transfer. If they don’t, then it’s a moot point because they won’t rack up much if any loans. And probably won’t transfer.

Re: Skipping college. I think this is much more of a viable option. Do all jobs/careers really require college? Absolutely not. I firmly believe that we are college-educating some people that should just not be there. Perhaps they should be a plumber, hair stylist, small business owner, whatever. There are tons of good jobs, with decent pay and benefits, that do not require college. Why do we discount this way of life as a society???

Also, college costs are crazy but what about working your way through college and paying for it yourself? I am sure it would take longer but I also think if the student was very sure they wanted and needed that degree, they could make that happen. This approach seems best for a less expensive college option obviously. And it weeds out those who don’t want it as badly but are there because it’s paid for by a loan. Or Mom & Dad.

I should note that I attended a community college and transferred to one of the top public universities in the west. It worked out fine for me. I got a good paying job straight out of college. I also still made friends at my university. I do think the dynamic is different transferring in. You don’t have the freshman dorm experience. But it doesn’t mean you don’t still meet good friends. Most universities have programs specifically for transfer students to get to know one another. There are also transfer dorms, etc. There are ways to still make it a good start to university.

Yes! More people could be apprentices. How many college educated people are now hair stylists and makeup artists, carpenters and contractors? They were driven and risk-taking to begin with, they will be driven and make good decisions even without a degree.

We used to provide that apprentice-style training at the high school level; it was called vocational training. Most places have dropped it now because it was considered “tracking” and come on, Everyone Should Go to College!

Um, no. Everyone shouldn’t. Just like everyone shouldn’t be working on my car or cutting my hair. When I taught high school, my students who aspired to non-college jobs were shoved through the college prep curriculum like everyone else then had to accrue additional expense with vocational training after they graduated. It shouldn’t be that hard.

I love the idea of starting at community college for things that works for. My oldest son left for Purdue today. He’s studying something that you really do need full-blown Purdue for, and something that if he sticks with it will lead to good employment.

My younger boy has a budding curiosity about accounting. If he goes that path, I’m going to want him to at least start, and maybe even finish, at IUPUI, the IU/PU branch here in Indianapolis. I gather that it’s like 20-25% of the cost of full-blown IU or PU.

Penelope, your #3 is intriguing. Community college is really cheap and if you pick a good one, the education you receive is on par, if not better than, a state school. Plus, I can’t help thinking of all your advice about résumés — you tell the story you want to tell, not necessarily all the details of what actually happened. So let’s say your sons go to Madison College (a community college semi-local to you) for two years but they they transfer and graduate from the University of Wisconsin — the degree is from UW. The piece of paper says UW. No one ever has to know two years of it were spent elsewhere unless that’s something your boys want to share. And you have not hobbled them (or yourself) with nearly as much debt.

As a homeschooling mother of four (the oldest of which is 15) with a tight budget and nonexistent college funds for our kids, I do a fair bit of thinking about their educational futures. They know that they are 100% in charge of any higher ed they want, yet I’m torn between feeling that we’re undercutting them because we are encouraging other-than-college options and like I’m being hypocritical because I had so much fun in college! We live in a college town, and our social circles are all invested in the local Mennonite university—to imply that the debt from such a school isn’t worth it is practically sacrilegious. I wrote about our dilemma here:

You are leaving out another huge viable option, and that is to join the military. My G.I. Bill from serving 4 years in the Air Force paid for both an associates and then a bachelors degree for me. My husband is still active duty air Force and they’ve paid for his bachelors and will pay for a Master too if he decides to get one. Also, the military will pay off student loans for you when you join usually, although we did not have any.

Both of our homeschooled daughters say that they’re going in the Air Force too, the eldest possibly working in weather, and the youngest in dentistry.

I am friends with an Army officer who went to West Point Academy and obtained an engineering degree. I have known him since he was about 9 years old and he is now in his thirties. He is currently teaching at West Point, and the Army has recently paid for his multiple graduate degrees at Columbia University, plus a basic housing allowance.

Not a shabby way to obtain debt free education if one desires to go that route.

Posted by YesMyKidsAreSocialized
on August 18, 2015 at 8:46 pm
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When I was in the military, I contributed $1200 in one year to the G.I. Bill. In return, I had access to $10,200 for education after I discharged from the military.

(It sounds like the G.I. Bill has improved since I was in. I think other branches gave more for education than the A.F.–I don’t know why.)

While in the military, I took university courses on base (the local university’s instructors came to base to teach). The military paid 75% of any college course I took while I was active duty.

Unfortunately, a lot of people join the military for the G.I. Bill only to find themselves in wartime situations they didn’t think they were signing up for (I was in during wartime). Also, being classified as “government property” wasn’t all that appealing.

(All that said, I had some of the best times of my life in the military. The people were really great. The civilian world was a cold, lonely shock when I came back. One of the things I loved about the military was that they put you in a job; and they trusted you’d do the job and do it right, and you did—the opposite of the civilian world where we are always trying to prove ourselves.)

I want this for my kids. I have my own student loan debt, though. We will be able to pass along some of my husband’s post 911 GI Bill, which will help with some of the cost should they choose to go to college. I’ll be pushing public colleges unless we can afford private tuition, which would require that we become rich in the next 8 years. My oldest might end up in an arts school. He draws really well, but we’re learning photography and photoshop, and website building and all that stuff at home. He may end up being a freelance artist of something, who knows. And he may not need art school, but he would probably make a good engineer too, so…who knows. But I definitely want them debt free. Thanks for reminding me of this.

The community college degree is a great idea for some people. A lot may depend on the major, though. My major was Music Performance, and none of the community colleges in my state offered the music theory and history courses/track required by the school where I graduated. So, if I had attended community college first, the way my school was set up, I still would have been at the four year college for 4 years- taking my undergraduate years up to 6 rather than 4. I took community college courses during my summer sessions, though, and it worked well for me and helped save a little money because I lived at home with my parents during the summers. It didn’t shave off a lot of time from obtaining my degree, though, but I finished the degree in 4 years while it is not uncommon for the degree program to take 5 years.
My husband just started medical school, and I could be wrong, but I believe some (or maybe all/most) medical schools require the science pre-reqs to be completed at a 4 year school. I guess, though, these medical schools may not care where someone took a class like Literature, but I don’t know.
What about dual enrollment programs for students still in high school? Both my sister and my brother completed dual enrollment courses at community colleges while in high school, and my sister started her college years almost as a sophomore. I don’t know if dual enrollment programs are available in all states, but where available, they are worth considering.

I don’t think that overprivileged has to mean lacking in gratitude or incapable of understanding what mom & dad bought for you. I came out of school debt free thanks to my grandparents. I can’t tell you how thankful that I am for this advantage. Sure, I also work hard, but I face an unparalleled advantage in pretty much every arena thanks to my advantages.

I think that if there is no college fund, kids will self-select into the headings.

1. Full scholarship: very academic kids
2. State college: kids with social skills
3. Community college: undecided, or looking in entering a trade
4. Skip college: like 1/3 of Americans, can find their own way without relying on higher education

“2. Choose a state school. My older son wants to get a PhD. Which means his graduate school matters a lot more than his undergraduate school.”

As someone whose science PhD from UM-Ann Arbor was paid for by a full scholarship (plus living stipend and health insurance), I can tell you that your son’s choice of undergrad school will not be super important, but how well he does there, what types of contacts he makes (references), and what type of research experience he gains will be hugely important. If his undergrad research experience is lacking (and even if it isn’t), he can still overcome that and give himself a big edge by joining a postbaccalaureate program or working as a lab technician or research assistant for a couple of years.

And yes, the choice of grad school matters. Go for the best in the field. Sometimes that’s a state school, sometimes it’s Stanford or an Ivy League. He shouldn’t go to any school for a research PhD if they’re not willing to foot the bill.

It’s not that hard to graduate debt free if you are willing to make some sacrifices. My son took some college classes his last two years of high school at the community college. These are free in our state. Then he worked part time, did his AA at the community college and transferred to the state university for his degree. Because he worked in his field for two years, he was able to get a full time job prior to graduation. He put the hard work in and it paid off ! He gave up living on campus, going to a private school and all the excitement of the first year college fun. It was worth it.

About #2: I have a PhD in science, and my graduate school was in the top 5 in the country for my discipline. So I can speak a little about getting a PhD and stay debt-free. I I also sat on my department’s admissions committee for several years.

You probably know this, but no science graduate student pays for school. All receive free tuition and a living stipend, either by teaching or through their research (meaning they get paid to do research, and since research is what is need to finish a dissertation, they are getting paid to get a PhD). If someone is good enough to be admitted, they go for free. (There is a lot of money in science, and graduate students are the worker bees.)

You are right, you don’t need to go to an elite school to get into a good graduate school. Here is an interesting case in point: I graduated from a small, rural high school, started college at a third tier public school, transferred “up” to a second tier public school, and did research during my senior year. A fellow student graduated from the exact same small, rural high school (2 years behind me), attended the exact same third tier public school, and graduated from that school, although he spent a summer doing research at a major research university. We both were admitted to the exact same elite graduate program. The fact that my undergraduate alma mater was a little more prestigious than his did not matter.

What matters for getting into a good graduate program? In my experience: good grades, good (or at least decent) GREs, good letters of recommendation, and research experience in (or after) college.

My son did Running Start (dual enrollment for part of his Junior and all of his Senior Year (its free, too, bonus!). He enjoyed the CC so much, he finished with his AA the following year then transferred to our state’s Flagship University as a Junior. We have saved one year of college for him. He has to come up with the rest. He has 2/3 saved for senior year, and is working to pay for his living expenses. We felt like he needed some skin in the game, but have every belief that he will emerge debt free. Our CC is rated very high, and in the end, his 4-year degree will only list the flagship university. I am actually not sad that he missed the Freshman dorm/drinking experience, and neither is he.

I do love following your blog and must admit that I’m growing more and more curious about homeschooling as a possibility for my future kids (at least in lieu of elementary school), but this typically is an article where as a European, I can just shake my head. Not at you, but at the society you live in – where kids are shouldered with tens of thousands of debt before they’ve even started to figure out what they want to do for a living.

Nobody I know here has student debt from studying in Europe. Yes, my parents supported me for my (tiny) apartment and living expenses, but if they hadn’t had the means I would have gotten support from the state like most of my friends. Or I could have decided to go the excellent university in my town.

I’m pondering a move to Canada at some point in the near future with my fiance who holds Canadian citizenship as well, and I know colleges there aren’t as expensive as in the US, but still – my first choice for my kids, unless they want to learn a trade, will be the excellent public free universities back in Germany and Switzerland.

Christiane, it’s true that college costs are less in Canada, but they seem determined to reach comparable levels. The Canadian government now brags that you can get a degree at Guelph for 25K a year vs the 50+K it would cost at USC.

I can’t imagine wanting to move here from Germany or Switzerland. There are upsides – if you have a top salary, it’s probably higher here, especially for doctors – but you see the contortions folks here have to go through to work around our failed education system.

I have Scottish neighbors that are struggling even with well paying jobs. We recently had the conversation about our kids higher Ed prospects. They had completely forgotten the U.S. System does not pay for their kids’ college education, like theirs was paid for in Scotland.

We’d be moving to Canada to be close to my fiance’s family for a few years, and because we’d love to have a house with a yard for our kids when they’re little. We’ll move back to Europe when they’re older to be closer to my family, and by then we’ll be further ahead in our careers and will hopefully be able to afford a yard in Europe too.

And both my fiance and I each have two different mother tongues (total of 4), so we’ll need to move around with the kids a bit to make sure they get to live in environments where these languages are spoken. In Canada we get two for the price of one :D

Remember that English Canada and French Canada are not really the same nation. They’re the same country, only barely, but don’t expect your kids necessarily to be exposed to French in English Canada or vice-versa.

When I lived there as a kid (in English areas of Ontario), it was basically illegal to teach French in school except for kids who could legally demonstrate hereditary Francophony, and those kids were segregated from the rest of the school. Laws keep changing up there, but Quebec is legally French-only, BC and most of the Maritimes are de facto English-only, every province and town in between has its own balance, and it’s all very political. Good luck with that; I recall that my mother was disappointed that it was essentially illegal for teachers to speak to us in French when we were kids, despite the fact we spoke it as well as English at one point.

Luckily the members of his family we want to live close to live in Quebec but near Ottawa, ie on the French/English border. Like this the kids can go to school in French and learn English from their cousins/grandparents/friends; I’ll provide enough German so that they feel comfortable around their German family, and my fiance will teach them Hebrew. (Obviously it’ll all depend on our kids’ affinities for languages, but with that set-up they should at least have the opportunity to learn!)

My husband went to school in the UK. Came out with 4k in loans, tied to employment (not credit) in three years. He agrees that he cannot understand our system. He can’t have the career he has now there, though.

Another option would be to teach your children to save money when they are very young. I began working and saving during summers and after school when I was 14. Since my parents paid for all my needs and many of my wants at that age, I was able to save enough to cover tuition for my first three years at a public university.

I am terrible at saving. My husband is much better and learned from an early age. I am definitely NOT wanting to pass that along to my kids. I follow the Bank of Dad system that I learned about on the EconTalk podcast. Lets say I give my kids $40 for spending money on vacation. Anything they don’t spend can be deposited in their savings account. Money they earn doing extra chores can either be spent or saved. They have minor savings accounts at the bank and I pay 5% interest on their savings on the first of every month. I make a BIG deal about doing the math and transferring the money. I’ve been doing this since kindergarten with my now 5th grader and he really gets it. He understands earning interest and paying interest on credit cards as well as most grownups. I do not require them to spend/ save/ give x%. The younger boy spends more now – just like his brother did at that age, but his big brother saves 90% of money that comes his way.

I wonder if it would be possible for you to set up a college fund account. I don’t doubt your ability to pay for their college education when the rubber hits the road. I’m wondering if you could set aside money each week or month or whatever and tell yourself it’s not your money. You may be able to do it if you use some of the strategies you outlined in this post on money and self-discipline – http://blog.penelopetrunk.com/2015/06/08/play-this-game-what-would-you-do-if-you-were-a-millionaire/ . Actually the money wouldn’t necessarily be for college. However, it would be for the use of your sons at their discretion when they reach college age. And it wouldn’t have to be the total amount of your contribution but it would be a start. I think it would probably make everybody feel better – most importantly yourself. A goal to set for yourself that’s achievable. A goal without any specific amount of money at this time. The amount of money is a goal detail that can be changed as your child’s education goals become more focused.

I think that by the time your kid will be ready to go to college more universities will be offering testing out option for the undergraduate level because of the demand, the change in demographic (Gen Z is smaller in number than millennial) and inflated cost of the college education. So if they still want to fill the seats they either have to lower the price per credit which will decrease the schools perceive value or they can offer the test out option for entry level courses and get highly motivated, self-directed learners while keeping the value of the college brand intact.

Without a doubt, the only reason I was willing to take risks in my 20s was because I had no college debt. I intentionally chose the school I did because they offered me a free ride.

The first year after I graduated, I actually started my own company. Did I ever tell you that? I managed storefronts & inventory for 3rd party sellers on Amazon and really enjoyed it…until someone didn’t pay me $900, which was A LOT of money to me at the time. So when I was offered a very decent salary to do the same kind of work for an online real estate company, I jumped at the chance for security (& not having to do cold calls anymore…OMG I made so many cold calls in my own business).

Then the recession hit and the real estate market went to shit and I was let go. And i got pregnant. And had to reevaluate priorities. But we still had no debt. So, even though we make very little money, I was still willing to take risks. That’s how I started my art career, and now it’s actually starting to kick off.

I’ve made a ton of mistakes in my life. I readily admit that. But avoiding debt like the plague has perhaps been one of the smartest things I’ve ever done because it’s given me so much freedom to just be myself.

My state has a dual enrollment program where high school students can take college courses (for both high school and college credit) prior to high school graduation for FREE—paid for by the state. This option isn’t always common knowledge, so research it in your area just in case.

There are two great options for getting college credits by taking subject-based exams for around $100 a test:
– CLEP (clep.collegeboard.org)
– DSST (getcollegecredit.com)

Regarding CLEP, there is no age minimum to test, you test at specified testing centers in your area, pass/fail basis (passing is usually 60%), credits are good for twenty years, and I think you can take the tests numerous times (not sure how much time is required between each test). There are study guides for CLEP (_CLEP Official Study Guide_ from The College Board & petersons.com/college-search/clep-test.aspx).

I remember hearing about CLEP and DSST over twenty years ago. But I just found out about a woman whose kids each finished three years of college via passing CLEP and DSST tests.

Just check with the colleges and universities in which you are your child are interested to see which CLEP and DSST credits they will honor (also transferology.com).
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I went to several community and technical colleges and I loved them. The range of students’ ages is great (ages 16-70+); and the environment is usually very comfortable for learning and approaching instructors.

I don’t know of anyone personally whose career was impacted by which college or university they graduated from (except maybe one medical doctor). But I know plenty of people who spent $25,000-40,000+ per year at private colleges, and they either aren’t working now or they are making less than their annual tuition at their jobs.

It depends on the kid, right? Son #1 is typical engineering material, and has been since he was born. We all just “knew”. He even looks like one. It’s a little bizarre. He started at a university, lived in the dorm, is a third year electrical engineering student and is totally in his element. Son#2 is different; creative thinker, great design sense, has always had a knack for making money, is not so good at sitting still, math or science. He was passed through the system (public school) with a less than stellar education. My biggest regret….I didn’t stop that train.

Son #2 was adamant that he wanted to take a year off after high school. He graduated high school this last December and got a good job at a huge local company doing physical labor. He turned 19 this month. He looked around at the 50 year old guys still there doing physical labor, not being able to make ends meet and it bothered him. He actually negotiated a raise for 12 of his coworkers. Go Logan! They promoted him to a level usually reserved for 3 year employees within the first few months. He’s an awesome worker. He can think.

Last weekend he visited Boulder. It was the weekend before fall classes started. He saw the students excited to be there and having fun. He said it depressed him. It hit him, he wanted to go to college. He took the next day off and we made a mad scramble to enroll him in a college. It was the first week of classes everywhere. We managed to get him into the community college, he did his assessment testing on the last possible day, signed up for his classes and voila! He’s in! His first day is tomorrow. It was SO much fun scrambling around with him, making it happen. We went to lunch, we laughed about the situation, it was great…..He pulled it off though. I told him I was so happy that he acted on his desire instead of just pushing it aside thinking it was too late. He was motivated and wanted to get started. So, he did what he had to do to make it happen. He can always transfer to another school later. I think he’s in the right place though.

I actually enjoyed sharing the story on my FB page as it was unfolding. It was my little rebellion against the many parents posting pictures of endless campus visits (One of my old classmates took her daughter to visit 15 out of state schools – seriously?) , fancy starter apartments, granite topped kitchen counters in the student housing ?????!!!!! I get a little sick of all of that, to be honest.

My son will be just fine, no matter where he ends up, as will his engineer brother. Every path is different. Things work out how they should somehow.

My friend from Russia who went to grad school for film in Los Angeles saved up and paid for all of it before she started. She now works in film and was able to take lots of risks because she didn’t have any debt. She doesn’t understand why Americans go to school before they can pay for it. She has a point that goes along with Penelope’s.

Another friend of mine took out student loans. She is a secretary at an acting school. She is stressed about paying back her debts, and she graduated 10 years ago.